Why You Should Never Invest in Facebook or Google-owned Blockchain

Maksim Izmaylov

For me, there are only two decent blockchains that exist today: Bitcoin and Ethereum, with Bitcoin being the most decentralized of the two.

Whatever you hear out there, the words “blockchain” and “decentralization” are almost synonyms to me.

Bitcoin was created as a “purely peer-to-peer version of electronic cash,” and it is the first decentralized technology. Unfortunately, this philosophy was poisoned and perverted by all sorts of con artists, from your email scammers to large international institutions. The chances are that you first read it here.

Blockchain can’t be used by a single company to gain an advantage on others.

It makes absolutely no sense for an “Acme Corp. Blockchain” to exist because blockchain is a network technology, just like the internet, which means that it is valuable only when it has a large number of participants.

You would argue that large networks under centralized control exist (e.g. banks, Facebook, Amazon), but these centralized organizations have started to fail in a variety of ways that are not good for society as a whole. E.g.

All big corporations of today (and pretty much our whole society) are built upon innovations that were given to us free of charge, no patents, no strings attached. The computer was never patented, but not because they didn’t try, and the institution where the World Wide Web was created, CERN, deliberately and purposely put it into the public domain, “to maximize its dissemination.” They add: “these actions allowed the web to flourish.”

Bitcoin creator went even further, he didn’t want the money, and he didn’t want the fame either. In this light, the attempts of some individuals to claim they are Satoshi Nakamoto and hundreds of blockchain patents filed by corporate giants can evoke nothing but disdain.

While self-interest is one of the most important drivers of progress, sometimes it could be an impediment. The story of the Gopher protocol decline, the WWW rival, is not widely known, but it’s a perfect example of how privatization (driven by self-interest) of a network technology led to its death.

Imagine the whole Internet being controlled by one organization. On the first day, that organization would probably ban all their critics and, perhaps, knowing exactly where the most fierce of them live, physically eliminate them.

We can only speculate where would we be today if computer was patented or if CERN decided not to set the WWW free. Let’s conduct another quick thought experiment. Let’s say Jimmy Wales was as greedy as Martin Shkreli, so Wikipedia was never free to access.

It’s easy to see that Wikipedia would have had to compete with Encyclopedia Britannica, and a few other projects, and at the end of the day we’d have a few paid websites with just a few professional editors and a fraction of content that’s available to you free of charge.

Jimbo would have had much less wealth as well, he would have never created Fandom (formerly known as Wikia and Wikicities) and gained the acknowledgment he enjoys today. If you have other theories, please feel free to leave a comment below, but we have to make sure that a for-profit organization will never own Wikipedia.

Some technologies and ideas are bound to be free, they just don’t work in closed environments. Blockchain is one of them. Bitcoin is a useful tool for anyone and everyone on the planet, but instead of building services around it, the most prominent financial organizations out there are engaged in a toil of Sisyphus, creating their own versions of Bitcoin that would never have any meaningful adoption.

How can for-profit businesses benefit from open technologies like blockchain?

Embrace what comes your way. If you can use Bitcoin to allow users across the globe to pay for your services, why wouldn’t you? You don’t need to create your own crypto-token! If it is profitable for you to automate some business process using the Ethereum computer, do so! No, it doesn’t make any sense to build a new smart contract platform.

Moreover, support the development of these technologies. Donate to the foundations that make sure that Internet stays open and uncensored, that the world encyclopedia stays free and not affected by any corporate or political agenda. Everyone, including your organization, will benefit from it, and the effect will be exponential.

Companies like Alphabet, Microsoft, IBM, and many others, understand that.

Alphabet is one of the largest and wealthiest companies of the worlds, and Android, its open-source mobile operating system, generates billions of dollars in revenues through offering Google products by default. In 2017 37.93% of all devices connected to the internet were running a version of Android, making it the most successful OS in history. Without Android being open-source, the community of its developers and users would not have existed, and it would not have been possible for Google to launch their own phone, Pixel and continue expanding their empire further.

For 25 consecutive years IBM has been awarded the most patents in the US, and just last year IBM stock declined 25.9%. I am not implying anything, these are simply the facts. In October of 2018, IBM announced that it will buy Red Hat, a provider of enterprise open-source solutions, for $32 billion dollars (3 times its market cap in 2014). The times they-are-a-changin’ and it seems like open-source software took over the world.

What are some of the signs that you’re looking at a project that uses the word “blockchain” as hype opportunity?

They use terms like “private blockchain” or “consortium blockchain.” It’s just a confusing name for a shared database that in this environment doesn’t need any blocks to be connected (or chained). Distributed architecture is a legitimate computer system design, but it doesn’t have anything to do with blocks or chains.

The code of the project is not released under an open-source license. It means that you do not have all the benefits of open-source development:

It also means that the project is operated by a for-profit company. Why is it bad? Well, it changes everything. A for-profit firm has one goal only — make money for its shareholders, founders and investors, so the product that costs $1 today and promises to rid of all your problems, can easily cost $100 tomorrow, because the shareholders decided to do so. Non-profit structure combined with open-source approach prevents situations like that.

Blockchain is not just a technology, it’s a philosophy very closely intertwined with the idea of community-owned projects. Instead of placing your trust into a corporation, we can participate in completely transparent economic systems with no room for cheating, and that’s exactly why this idea is so alien to some people and organizations.

The choice is yours.

Maksim Izmaylov is a serial entrepreneur with the background in software engineering and law. He thinks that blockchain and other technologies can help us create a better world, e.g. reduce inequality. He founded two travel startups, Roomstorm and Winding Tree, and Travel Tech Con, a conference for startups and software engineers from the travel industry.

About Editorial Staff

8 Comments

Valter Zikovic

Maksim,
Thank you indeed for this article. The blockchain is one amazing technology and its decentralized philosophy is unique. It is peoples way out from the bank’s poisonous claws in every day living. Central banks, funds and the most bloodsucking creature of our century – Wallstreet are the greatest venoms to the world society. The last hash war by the few idiots proved that the Bitcoin is one of a kind and that can not be changed. I personally recognize the Bitcoin blockchain as unique and only that can fulfill the Satoshi Nakamoto vision – mass adoption, decentralized peer to peer crypto exchange and payment. All other “TRY TO COPY” philosophy WILL FAIL. Any good, prooved mass adopted projects I do support if there is a “USE CASE” and will take us out of the creatures I mentioned above. Thank you.

chris

Henry VIII

ETH & BTC only is a bit short-sighted….we’re not there yet – but 3rd Gen Cardano will tick all the boxes with improvements across the board, addressing short-comings of both ETH & BTC. Mass-adoption in the developing will bring this blockchain protocol into the mainstream within 2-5yrs…fill up your bags at these prices while you still can 🙂

Bitcoins and Gravy

1) I would never use anything associated with Zuckerberg the criminal.
2) This author wrote: “For me, there are only two decent blockchains that exist today: Bitcoin and Ethereum, . . .”
This is a provably false statement. There are numerous blockchains that are solving and will continue to solve real world problems.
And there will likely be thousands of private, well functioning, high utility, high value blockchains in the future.
Imagination and optimism are more important than being short sighted and pessimistic but they all have to contend with reality.
: )